Hungary’s Strongman Has a Weak Spot

Viktor Orban may have won, but a narrow loss in the countryside suggests that corruption could one day be his undoing.

An activist of the new centrist-liberal Momentum party over-pastes an anti-migration billboard on March 28 in Budapest, Hungary. (Attila Kisbenedek/AFP/Getty Images)

PECS, Hungary — In seeking re-election, the ruling Fidesz party has campaigned fiercely against Muslim immigration and the man it accuses of being its main advocate: the Hungarian-born financier George Soros.

Unsurprisingly, it was not cosmopolitan Budapest that was the main target of that campaign but the countryside — the heart of Prime Minister Viktor Orban’s support base. The preliminary results of the April 8 parliamentary election showed Fidesz winning everywhere except four cities, including the capital of Budapest.

“The elite may laugh at these attacks, but in small towns or villages the people rarely have access to media other than pro-governmental” outlets, says Andras Nyirati, the head of a foundation in Pecs that focuses on fighting poverty and human rights education.

Orban, a self-described “country boy,” has always turned with ease to more traditionally oriented voters. He has mastered the strategy of creating and then targeting a group as “the enemy of the nation,” a strategy that, among other factors, propelled his Fidesz party to landslide victories in 2010, 2014, and once again this year. In the past, before migrants and Soros became the scapegoats of choice, socialists, foreign banks, the International Monetary Fund, and Eurocrats in Brussels served to mobilize resentful citizens.

Nyirati himself has felt like an enemy, too. Last year, his NGO signed a deal with the Open Society Foundations, founded by Soros, to regrant $500,000 to organizations throughout Hungary’s rural south to fund what he called nonpolitical projects connected to sports, kindergartens, environmental protection, and drug prevention, among other issues.

Soon after, Nyirati was accused by pro-Fidesz media of supporting Soros’s plan to Islamize Europe. The city council then issued a resolution, in which it called for Pecs citizens not to rent office space to Nyirati’s NGO. As a result, the owner of the its temporary office said he didn’t want to have problems and let the NGO go.

The fear of falling into Fidesz’s disfavor is a defining characteristic of politics outside Budapest, says Attila Babos, an investigative journalist and co-founder of the Pecs (Free Pecs) website. “The main employer is the city or, to be precise, Fidesz. So, if you owe them your career, you will not stick your head out,” Babos explains.

He used to work at the Dunantuli Naplo daily, one of several regional outlets that in the last two years were taken over by government-friendly businessmen. Dunantuli Naplo was bought up by the Opimus Group, owned by Lorinc Meszaros, Orban’s childhood friend, who fired most of the staff, including Babos.

Pecs, a picturesque town in southwestern Hungary, is, in addition to Budapest, one of the very few places where Fidesz lost to an opposition candidate in the April 8 election. In Pecs, the independent academic Tamas Mellar, emerged victorious. He managed to win despite the fact that three years ago the city hosted hundreds of migrants and refugees at its railway station as they moved through the Balkans to Western Europe — an event that Fidesz has used to stir up xenophobia among voters across Hungary.

In Pecs, citizens briefly encountered foreigners, but most Hungarians have never seen a single migrant or refugee. Nevertheless, the posters of invading Muslim hordes with a huge stop sign have been plastered all over the country.

“I don’t really want any strangers here, but I have nobody to vote for either,” says a woman in her mid-50s at the city’s central Kossuth Square in front of an exhibition targeting politicians whom Fidesz doesn’t consider sufficiently tough on migration.

Fidesz’s loss in Pecs, as narrow as it was (by a few hundred votes), will be hard for the party to swallow. After all, the city was the site of Fidesz’s first major victory and has served as an experimental workshop for its policies ever since. The current mayor, Zsolt Pava, was elected in a snap election called in May 2009 due to the death of the former left-wing mayor, a year before Fidesz’s unprecedented nationwide triumph, which put Hungary on the path toward Orban’s brand of “illiberal democracy” and hard-line nationalism.

One of the tactics first introduced in Pecs and later across the country was aggressive action toward foreign investors, aimed at buying up their assets, especially in the energy, telecom, and retail sectors.

Already in 2009, the local government unilaterally terminated a contract with the French company Suez Environnement, the minority owner of the Pecs waterworks. Later, using similar strongarm tactics, the authorities sought to take over the Zsolnay Porcelain Factory from a Syrian-Swiss businessman. The first case ended with more than $10 million in compensation for the company; the second is still proceeding.

The reason for targeting foreign businesses and maintaining simmering conflicts with them was the need to “build up Hungary’s new elite,” according to Agoston Samuel Mraz, a head of Nezopont, a Fidesz-backed think tank based in Budapest. “It was in the country’s interest” to have a strong base of capital assets, he says.

Pecs is also a good example of how careless Orban and his party have been in dealing with public finances — and that could explain his party’s surprising loss here.

Fidesz’s rule in recent years has left the city $37 million in debt, which, as confirmed in December, will force the government to tap reserves for extraordinary spending. Already in 2013, Pecs needed a whopping $170 million bailout from Budapest to plug the budget holes caused primarily by Fidesz’s left-wing predecessors.

These days, however, there is no one but Fidesz to blame. Babos suggested that the city had been reckless with spending on public transport, leisure facilities, and holding referendums. Neither the local Fidesz office nor the mayor responded to a request for comment.

In Pecs, the key to the opposition’s success appears to be the fact that scandals among the ruling elite exceeded the level voters were willing to accept. The local Fidesz leadership has become burned out, many locals told Foreign Policy — a movement that creates enemies to cover up its own wrongdoings. “In Pecs, the party seems far more interested in keeping its stranglehold on politics and the economy than coming up with new policies to help local citizens,” says Fanni Aradi, an activist, noting that Fidesz didn’t even bother to present an election platform.

Aradi co-founded a Pecs-based association to help homeless people and families facing eviction from municipal housing. When she demanded public information about Pecs housing policy, Aradi was told she would get it only if she paid $785. The fee was legal because parliament introduced such restrictions in 2015. She went to court and lost.

At the national level, however, both Aradi and Nyirati are pessimistic; they see no change on the horizon. The opposition will likely remain divided; there has been new election gerrymandering in favor of Fidesz, and Orban’s supporters are well mobilized, they say.

If there is any chance of turning voters against Orban in the long run, poverty and corruption could be the key issues. Pecs has a relatively low poverty rate, but there are regions, in Hungary’s northeast, where 20 percent of residents live below the poverty line, according to data collected by the Hungarian Central Statistical Office. These pockets of poverty remain despite the fact that Hungary’s annual growth is more than 4 percent and unemployment is extremely low, at under 4 percent.

This year, it appears that many of the poorest voters still backed Orban out of a belief that their troubles can be blamed on enemies of Hungary who are interfering in economy. “Some supporters think Fidesz-linked scandals are lies. The others acknowledge them but say this is the price worth paying for Orban rebuilding the nation,” Nyirati says.

That may change if the gap between rich and poor widens further. As Fidesz has entrenched its control over formerly foreign-owned companies, businessmen with close links to the party have grown wealthy, acquiring stakes in major industries and prospering from public contracts, often partially financed by European Union funds.

Between $8 billion and $12 billion has been distributed in that way, says Istvan Janos Toth, the director of the Corruption Research Center Budapest, which analyzed more than 126,000 public procurement contracts from 2010 to 2016. “Everyone involved in the tender — the contracting authority, successful tenderer, broker, and even the loser — is from the same circle and gets some share. Everyone is winning,” he says. But the vast majority of regular Hungarians, who lack insider connections, are losing out.

Even so, Mraz, from the Fidesz-backed think tank, downplays the findings and denies that anyone has gone to court as a result. “Corruption is always part of the story, especially in Central Europe,” he says. “Besides,” he adds evasively, “in Germany, Angela Merkel openly supports Mercedes over Citroën, and nobody thinks it is corruption.”

Orban is likely more afraid. Toth contends that the prime minister fears corruption will turn his once-reliable supporters from the countryside against him. If that happens, he may move Hungary onto a more repressive path. He already hinted at such a move in March. “We are calm and good-humored people, but we are neither blind nor gullible. After the election, we will of course seek amends — moral, political, and legal amends,” he told a rally of 100,000 supporters.

Toth argues that Orban has tapped the darkest depths of the Hungarian soul by releasing all of their “fears and demons,” something that works especially well in rural areas.

He is not optimistic about where it may lead. “I would not be surprised by show trials and prison for enemies,” Toth says.

Dariusz Kalan is a Central Europe correspondent for international media and an analyst based in Bratislava. Follow him on Twitter: @Dariusz_Kalan. @Dariusz_Kalan